HIMS & HERS HEALTH, INC. References to the "Company," "our," "us" or "we" refer to
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includesforward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). We have based these forward-looking statements on our current
expectations and projections about future events. These forward-looking
statements are subject to known and unknown risks, uncertainties and assumptions
about us that may cause our actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may," "should," "could," "would," "expect,"
"plan," "anticipate," "believe," "estimate," "continue," or the negative of such
terms or other similar expressions. Such statements include, but are not limited
to, possible business combinations and the financing thereof, and related
matters, as well as all other statements other than statements of historical
fact included in this Form 10-Q. Factors that might cause or contribute to such
a discrepancy include, but are not limited to, those described in our other
Overview
We are a blank check company incorporated on
We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the private placement of warrants that occurred simultaneously with the consummation of the initial public offering, our capital stock, debt or a combination of cash, stock and debt. The issuance of additional shares in a business combination:
• may significantly dilute the equity interest of investors in our initial
public offering, which dilution would increase if the anti-dilution
provisions in the Class B ordinary shares resulted in the issuance of
Class A ordinary shares on a greater than one-to-one basis upon
conversion of the Class B ordinary shares;
• may subordinate the rights of holders of our ordinary shares if preferred
stock is issued with rights senior to those afforded our ordinary shares;
• could cause a change in control if a substantial number of our ordinary
shares is issued, which may affect, among other things, our ability to
use our net operating loss carry forwards, if any, and could result in
the resignation or removal of our present officers and directors;
• may have the effect of delaying or preventing a change of control of us
by diluting the stock ownership or voting rights of a person seeking to
obtain control of us; and
• may adversely affect prevailing market prices for our Class A ordinary
shares and/or warrants.
Similarly, if we issue debt or otherwise incur significant debt, it could result
in:
• default and foreclosure on our assets if our operating revenues after an
initial business combination are insufficient to repay our debt
obligations;
• acceleration of our obligations to repay the indebtedness even if we make
all principal and interest payments when due if we breach certain
covenants that require the maintenance of certain financial ratios or
reserves without a waiver or renegotiation of that covenant;
• our immediate payment of all principal and accrued interest, if any, if
the debt security is payable on demand;
• our inability to obtain necessary additional financing if the debt
security contains covenants restricting our ability to obtain such
financing while the debt security is outstanding;
• our inability to pay dividends on our ordinary shares;
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• using a substantial portion of our cash flow to pay principal and
interest on our debt, which will reduce the funds available for dividends
on our ordinary shares if declared, our ability to pay expenses, make
capital expenditures and acquisitions, and fund other general corporate
purposes;
• limitations on our flexibility in planning for and reacting to changes in
our business and in the industry in which we operate;
• increased vulnerability to adverse changes in general economic, industry
and competitive conditions and adverse changes in government regulation
• limitations on our ability to borrow additional amounts for expenses,
capital expenditures, acquisitions, debt service requirements, and
execution of our strategy; and
• other purposes and other disadvantages compared to our competitors who
have less debt.
As of
Our registration statement for our initial public offering was declared
effective on
Simultaneously with the closing of the initial public offering, we consummated
the private placement of 4,016,667 private placement warrants at a price of
Upon the closing of the initial public offering and the private placement,
If we are unable to complete a Business Combination within 24 months from the
closing of our initial public offering, or
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Proposed Business Combination
On
Results of Operations
Our entire activity since inception through
For the three months ended
For the three months ended
For the nine months ended
For the period from
Going Concern
Our unaudited condensed consolidated financial statements have been prepared
assuming that the Company will continue as a going concern, which contemplates,
among other things, the realization of assets and satisfaction of liabilities in
the normal course of business. As of
Our liquidity needs to date have been satisfied prior to the completion of the
initial public offering through receipt of a
We continue to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on our financial position, results of our operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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In connection with our assessment of going concern considerations in accordance
with Financial Accounting Standard Board's Accounting Standards Updated ("ASU")
2014-15, "Disclosure of Uncertainties about an Entity's Ability to Continue as a
Going Concern", management has determined that our liquidity position, mandatory
liquidation and subsequent dissolution raise substantial doubt about our ability
to continue as a going concern. No adjustments have been made to the carrying
amounts of assets or liabilities should we be required to liquidate after
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations,
operating lease obligations, purchase obligations or long-term liabilities,
other than an agreement to pay our sponsor a monthly fee of
Registration Rights
The holders of founder shares, private placement warrants and warrants that may be issued upon conversion of working capital loans, if any, be issued warrants upon conversion of working capital loans. These holders will be entitled to registration rights (in the case of the founder shares, only after conversion of such shares into Class A ordinary shares) pursuant to a registration and shareholder rights agreement to be entered into upon consummation of the initial public offering. These holders will be entitled to certain demand and "piggyback" registration and shareholder rights. However, the registration and shareholder rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until the termination of the applicable lock-up period for the securities to be registered. We will bear the expenses incurred in connection with the filing of any such registration statements.
In connection with the Proposed Business Combination, we also entered into the Parent Registration Rights Agreement pursuant to which the Sponsor will be granted certain customary registration rights with respect to its shares of New Hims Class A Common Stock.
Underwriting Agreement
We granted the underwriters a 45-day option from the date of the final
prospectus relating to the initial public offering to purchase up to 2,625,000
units to cover over-allotments, if any, at the initial public offering price
less underwriting discounts and commissions. On
The underwriters were entitled to underwriting discounts of
Critical Accounting Policies
This management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP. The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the following as its critical accounting policies:
Class A Ordinary Shares Subject to Possible Redemption
Class A ordinary shares subject to mandatory redemption (if any) are classified
as liability instruments and are measured at fair value. Conditionally
redeemable Class A ordinary shares (including Class A ordinary shares that
feature redemption rights that are either within the control of the holder or
subject to redemption upon the occurrence of uncertain events not solely within
the company's control) are classified as temporary equity. At all other times,
Class A ordinary shares are classified as shareholders' equity. Our Class A
ordinary shares feature certain redemption rights that are considered to be
outside of our control and subject to the occurrence of uncertain future events.
Accordingly, at
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Net Income Per Ordinary Share
Net income per share is computed by dividing net income by the weighted-average number of ordinary shares outstanding during the period. We have not considered the effect of the warrants sold in the initial public offering and the private placement to purchase an aggregate of 10,725,000 of the company's Class A ordinary shares in the calculation of diluted income per share, since their inclusion would be anti-dilutive under the treasury stock method.
Our statement of operations includes a presentation of income per share for
ordinary shares subject to redemption in a manner similar
to the two-class method of income per share. Net income per ordinary share,
basic and diluted for Class A ordinary shares are calculated by dividing the
gain on investments (net), dividends and interest, held in the Trust Account of
approximately
Net income per ordinary share, basic and diluted for Class A ordinary shares are
calculated by dividing the interest income earned on investments and marketable
securities held in the Trust Account, net of applicable taxes available to be
withdrawn from the Trust Account, resulting in a total of approximately
Recent Accounting Pronouncements
Our management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.
Off-Balance Sheet Arrangements
As of
JOBS Act
On
As an "emerging growth company", we are not required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an "emerging growth company," whichever is earlier.
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